In Specific Performance Suit Onus On Plaintiff To Prove 'Readiness & Willingness' To Perform His Part Of Contract: Gujarat High Court
The Gujarat High Court has reiterated that Specific Relief Act mandates that in a suit for specific performance, the onus lies on the plaintiff to prove "continuous readiness and willingness" to perform his part of the contract which the court may infer from facts and circumstances.
The court was hearing two appeals challenging a 1999 order of the civil court decreeing a suit in favour of the plaintiff. The civil court directed defendant no.1 to execute the sale-deed in favour of the plaintiff in respect of the suit property, on plaintiff paying remaining amount of sale consideration as per the agreement dated 01.10.1985 with interest @ 9% per annum.
The defendant no. 1 was directed to handover vacant and peaceful possession to the plaintiff after taking possession of the suit property from defendant no.2. Defendant no.1 was also held guilty for violation of injunction order dated 11.11.1987, who had despite the injunction order restraining him to change hands of the property had sold it to defendant no. 1, for which civil court had directed him to undergo 1-day imprisonment. Defendant no. 1 and 2 had moved the high court challenging the judgment.
The defendant contended that the plaintiff's suit for specific performance is not maintainable without asking declaratory relief that termination of the contract is bad in law. It was contended that as per Agreement to Sell (ATS), the sale consideration was fixed for Rs.60,000/- and the plaintiff paid barely Rs.2000/- and did not pay the balance amount within the six months from the date of execution of ATS which itself sufficiently displays that plaintiff was never ready and willing to perform his part of contract.
It was submitted that since ATS was cancelled by the vendor - defendant no.1, the plaintiff was required to file suit for declaratory relief seeking cancellation /termination of the ATS as bad in law, and without asking such relief the suit for specific performance is not maintainable.
Justice JC Doshi noted that condition no.8 in the agreement to sell entered into between the parties, specifies that even if the vendor is not ready and willing to perform his part of contract, vendee would be entitled to file a civil suit before the court for the specific performance of the contract and to get sale deed registered.
The court said that in absence of any condition authorising or permitting the defendant no.1 - vendor to terminate the contract, act of terminating the contract itself if bad rather in breach of terms and condition of the contract.
It further said:
"Whether the time is essence of the contract and whether plaintiff was ready and willing throughout the contract till hearing of suit are the issues intermingle with each other. Section 16(c) of the Specific Relief Act, 1963 mandates that in a suit for specific performance of plaintiff must allege and prove continuous readiness and willingness to perform his contract on his part on the date of contract and the onus is lying upon the plaintiff. The relief of specific performance under Section 20 of Specific Relief Act, 1963 cannot be granted unless and until plaintiff proves that he was ever ready and willing to perform his part of contract.
It is settled principle of law that factum of readiness and willingness to perform the part of contract is to be adjudged with reference to the conduct of the party and attending and surrounding circumstances. The Court may infer from the facts and circumstances whether plaintiff was ready and always ready and willing to perform his part of contract".
The court perused the trial court evidence and noted that the plaintiff had paid Rs.2000 towards "earnest money" at the time of execution of ATS.
Although as per term of ATS, the plaintiff was not required to pay any other amount towards sale consideration till sale deed is executed, he had proved that he did paid Rs.6000 "more" as he had proved through an entry in defendant no.1's handwriting in a Diary, which was not seriously disputed by other side at the time when the entry was exhibited.
The court noted that the terms and condition of the contract does not specify plaintiff to pay anything more than Rs.2,000 during the execution of the ATS. It said that the plaintiff had successfully proved that he has paid Rs.6,000 more to the defendant no.1 during the contract.
The Plaintiff also said that he continuously begging the defendant to execute sale deed by accepting remaining amount of sale consideration, and this was supported by the fact that within seven months of execution of sale-deed, defendant unilaterally rescinded the contract and forfeited earnest money although he had no such right.
"This act of the plaintiff sufficiently establishes that plaintiff was ever ready and willing to perform his part of the contract and he never denied to perform his part of the contract. The conduct of the defendant no.1 vis-a-vis shows that despite having no right or authority to terminate the contract, he terminated the contract (ATS) by issuing notice and further dared to forfeit the earnest money and thereafter pending the suit sold suit property to defendant no.2 in violation of prohibitory injunction order. This conduct itself is sufficient to mark that plaintiff is entitled to get specific performance of the ATS, because the defendant was not complying with the terms and conditions of the ATS rather has breached the same and was not ready to perform his part of ATS," the court said.
On the defendant's argument that time was of the essence for execution of the contract which plaintiff had violated, the court said that merely stating some time period to execute the contract by itself would not be a condition to apply the doctrine of “time is essence of contract”.
"There is no other condition which specifies that if the contract has not been specifically performed within six months, it shall be terminated or the defendant would be entitled to rescind or get away from the contract. In other words, absence of any condition in ATS, stating consequential action or result of not adhering time limit stated in contract, would make clear that it was not intention of the party to contract to make “time as essence of contract”," the court added.
The court also said that defendant no. 2 , who bought the property from defendant no. 1, was required to make necessary inquiry before purchasing the property and having failed to do so, cannot take the defence of being a bonafide purchaser.
On the conduct of defendant no. 1 the court said:
"It is important to note that the learned City Civil Court, while recording the evidence, noted the demeanor of defendant no.1, who changed his version like chameleon. At first blush, in pleading as well as in deposition he denied execution of such deed in favour of defendant no.2 but in same breathe accepted the same. In first blush, he did not recognize to defendant no.2 but in same breath he recognized defendant no.2. Thus all these conduct and the evidence clearly suggesting that it was defendant no.1 who was culprit for non executing sale-deed and he executed sale-deed in favour of defendant no.2 once prohibitory injunction was issued by learned City Civil Court".
The appeals were dismissed.
Case title: MISKINBANU JAHIDKHAN PATHAN & ORS. v/s ALISHER SUBHANALI ANSARI & ANR
R/FIRST APPEAL NO. 2516 of 1999